AIRLINE BIZ

Southwest Airlines Co. announced Thursday that former executive John Denison is joining its board of directors, along with media executive Daniel D. Villanueva.

Mr. Denison joined Southwest Airlines in 1986 as its chief financial officer after six years at LTV Corp and some time before that with Chrysler. He retired from Southwest in June 2001 as executive vice president of corporate services, at the same time that Herb Kelleher handed over the CEO job to Gary Kelly.

After ATA Holdings Corp. filed for bankruptcy in late 2004, Mr. Denison was named its president and chief executive officer in February 2005. He became chairman of a new ATA Airlines holding company, Global Aero Logistics, in January 2006, resigning the president and CEO jobs at the end of 2006.

As it reorganized to get out of bankruptcy court, ATA worked out a close working relationship with Southwest Airlines, including a code-sharing agreement through Chicago Midway and elsewhere. It gave Southwest customers access to some airports previously unavailable to them, including New York LaGuardia.

However, ATA Airlines filed for bankruptcy in April and shut down operations. This week, Southwest finalized a deal with ATA to buy ATA Airline's operating certificate in order to get its 14 operating slots at LaGuardia.

Southwest says Mr. Villanueva "spent 25 years in the broadcasting business as a television executive with Spanish International Communications Corp., and its successor company, Univision." He is currently a partner in RC Fontis, a California-based private equity firm, the airline said.

The appointment of the pair brings the Southwest board back to 10 members. It had been down two since Mr. Kelleher and Colleen Barrett gave up their positions of chairman and president, respectively, and stepped down from the board earlier this year.

Last summer, US Airways took the bodacious step of cutting back on miles awarded frequent fliers, including the frequent-frequent fliers who make up the premium levels of its Dividend Miles program.

On Thursday, US Airways said, if I may paraphrase, "Oops."

The carrier announced that it would return to giving bonuses to elite fliers, including a minimum of 500 miles, on all trips, even on really short ones like, for example, the 110 miles between Phoenix to Tucson or 84 miles from Philadelphia to Harrisburg, Pa.

From Andrew Nocella, US Airways senior vice president of marketing and planning:

Our Dividend Miles Program members are extremely important to us, and these changes reflect our continued commitment to delivering the best product with the most value to our customers.

Here's the particulars from the airline:

US Airways announced today that it is reinstating the bonus miles and 500 minimum miles accrual benefits for customers with Preferred membership in the US Airways Dividend Miles frequent flyer program.

US Airways Dividend Miles members earn and retain Preferred status when they purchase and fly at least 25,000 miles or 30 segments within a calendar year. The company also announced that all Dividend Miles members will receive a minimum of 500 miles for each segment flown on US Airways Shuttle.

Beginning Nov. 20, Dividend Miles Preferred members will receive bonus miles commensurate with their Preferred status level. Retroactive credit will appear in Preferred members' December Dividend Miles account statements for bonus-qualifying travel between August 6, 2008 and Nov. 19.

You'll note that the elite members will get their miles retroactively, although no such retroactivity was announced for non-elite members except for the US Airways Shuttle along the East Coast.

For all the details, here's the US Airways press release.

Speaking of Oneworld (see previous item), Oneworld sent out a notice this week pointing out that the rearrangement of its members' gates at Terminal 2 of Tokyo's Narita International Airport is complete.

It consolidates the facilities for Oneworld members American Airlines, Cathay Pacific, Finnair, Qantas Airways and Narita top dog Japan Airlines. But the happiest result for travelers is that the proximity means quicker connect times at Narita.

Here's how OneWorld describes it now:

• From Japan Airlines' domestic flights to its own international services, along with those operated by American, is now just 60 minutes.
• Between American and JAL's international flights is now 70 minutes.
• From American's international to JAL's domestic is now 90 minutes.
• From JAL's domestic arrivals to departures by other Oneworld partners in the terminal is now 100 minutes.

"Previously, minimum connecting time between American Airlines and Japan Airlines or any other Oneworld carrier at Tokyo Narita was 110 minutes," Oneworld spokesman Michael Blunt informs us. "So we've made a very big improvement."

Oneworld, the alliance headed by British Airways and American Airlines, has picked American chairman and CEO Gerard Arpey as its new chairman. He replaces Qantas Airways CEO Geoff Dixon, who is retiring from Qantas next week.

The announcement was made from Oneworld's meeting in London.

Said Oneworld managing partner John McCulloch:

Geoff Dixon has left some big shoes to fill as oneworld Chairman, but I am delighted that Gerard Arpey has agreed to bring his skills, insight and experience to bear in the wider oneworld arena.

The chairmanship of the alliance when it was originally launched 10 years ago was held by American Airlines, so this appointment brings us back full circle as we enter our second decade.

And Mr. Arpey says:

Oneworld has made an important contribution in helping our partner airlines endure a tumultuous decade while achieving the best collective profitability in the airline business.

The decade to come will surely bring big challenges, so we're going to be working even harder to make sure oneworld creates value for our member airlines, and delivers more services and benefits to our customers.

With that in mind, as chairman I am very much looking forward to welcoming Mexicana, another high quality carrier, to the Oneworld team.

One of those challenges, of course, is the opposition from American's pilot union to closer working relationships between American and other Oneworld members, particularly British Airways and Iberia. American is seeking antitrust immunity for its dealings with those airlines.

Oneworld includes as its members American, British Airways, Iberia, Cathay Pacific, Finnair, Japan Airlines, LAN, Malév, Qantas and Royal Jordanian, with various affiliates like American Eagle.

The Supreme Court of Canada on Thursday let stand a ruling that airlines had to let disabled people take two airplane seats but pay for only one.

The case was Air Canada et al. v. Canadian Transportation Agency et al. The court dismissed the appeal and ordered the airlines to pay the costs of disabled traveler Joanne Neubauer and the Council of Canadians with Disabilities.

In Ms. Neubauer's case, her rheumatoid arthritis made it necessary that an attendant needed to travel with her. But the ruling also applies to obese travelers who cannot fit into a single airplane seat.

Air Canada, Air Canada Jazz and WestJet had appealed a January decision by the Canadian Transportation Agency to require airlines to accommodate the disabled, in what's been referred to as the "One Person, One Fare" policy.

The CTA has spelled out these guidelines after the January decision:

The Decision means that, for domestic services, these carriers may not charge more than one fare for persons with disabilities who: • are accompanied by an attendant for their personal care or safety in flight, as required by the carriers' domestic tariffs; or • require additional seating for themselves, including those determined to be functionally disabled by obesity

An unkind colleague suggested this ruling puts a new meaning to the airline industry term "load factor." Very unkind.

We note that Southwest Airlines has a policy of charging an obese person an extra fare if the passenger spills over onto the other seat and the seat would have otherwise been filled with a paying passenger. This has made a number of larger passengers unhappy.

In Southwest's "Guidelines for Customers of Size," it states:

Customers who are unable to lower both armrests (the definitive boundary between seats) and/or who compromise any portion of adjacent seating should proactively book the number of seats needed prior to travel. This purchase serves as a notification of a special seating need and allows us to process a refund of the additional seating cost after travel (provided the flight doesn't oversell). Most importantly, it ensures that all onboard have access to safe and comfortable seating.

But Southwest doesn't fly to Canada yet. It has a code-sharing deal with WestJet, but the code-sharing won't begin until 2009.

We're reading the papers more closely from the U.S. Bankruptcy Court in Indianapolis. Here are some other points about the proposed sale of ATA Airlines and its LaGuardia slots to Southwest Airlines:

• If some other bidder comes along and beats out Southwest, ATA must pay Southwest a break-up fee of 5 percent of the alternative bid. Five percent of Southwest's bid would be $375,000, so the break-up fee would be in excess of that. In addition, ATA would pay Southwest's expenses in developing and pursuing its bid, up to a maximum of $250,000.

• There are provisions for Southwest to lease the 14 takeoff and landing slots at LaGuardia if the sale is delayed or doesn't go through as planned. The lease would be for 10 years.

• Southwest has already deposited $2.5 million of the $7.5 million bid.

• Southwest would be acquiring "14 specified 'operating authorizations' (also known as departure and landing slots) at LaGuardia Airport in New York; Air Carrier Operating Certificate; all Certificates of Public Convenience & Necessity; the Debtor's Operations Specifications; transferable trademarks and trade names; Aircraft Manuals and Training Manuals, together with all documents and other records, electronic or otherwise, with respect thereto."

We asked Laura Glading, president of the Association of Professional Flight Attendants, how she thought the election of Barack Obama will change the labor picture for American Airlines and the industry in general. Here are her thoughts:

We endorsed Obama. We're very glad to see him elected. No doubt a Democratic leadership is going to be a little bit labor friendly. They've always been in the past and there's no doubt they'll be again.

(Me: If airline labor talks got to the end of a cooling-off period without a deal?)

I think he'd be much more inclined to let this thing play out and let us use our right to self help, which is the right thing to do.

(Me: There's been a lot of disagreement on that point, whether he'd let a big airline go on strike)

I hope he'd let it play it out. We've lost so much, and a strike is one of the few bargaining chips that we have left.

On Wednesday morning, Southwest Airlines put out a press release about its efforts to get slots at New York LaGuardia. (Here's our story on it from Tuesday night).

Here's the release:

DALLAS, Nov. 19 /PRNewswire-FirstCall/ -- Southwest Airlines confirmed today that it has submitted a bid that would allow the airline to assume ATA Airlines' rights to operate at New York's LaGuardia (LGA) Airport through a purchase of ATA Airlines. The bid was submitted in connection with the publicly announced auction process in the U.S. Bankruptcy Court in Indianapolis and consistent with the Federal Aviation Administration's recent rule clarification regarding LaGuardia's slots.

Southwest is working with ATA Airlines with respect to the terms and conditions of the bid. The bid does not contemplate operating ATA, but it is intended to allow Southwest to acquire the LGA slots.

The $7.5 million bid seeks to obtain the rights to 14 slots at LaGuardia that are currently held by ATA Airlines, which filed for bankruptcy protection on April 2, 2008. Those 14 slots would permit an operation of up to seven daily roundtrip flights at LaGuardia. Southwest would not acquire, as a part of its bid, any aircraft, facilities, or employees of ATA.

"It is our intent, with the successful conclusion of the transaction, to make plans to initiate service from LaGuardia," said Southwest's Chairman, President, and CEO Gary Kelly. "Even in this volatile environment, we have said we must monitor the competitive landscape and take advantage of prudent market opportunities."

The bankruptcy court must approve the bid and a reorganization plan for ATA Airlines before Southwest could gain the rights to ATA's LaGuardia slots.

Once the acquisition is finalized, Southwest will work with the Federal Aviation Administration and the Port Authority of New York to commence service at LaGuardia, including acquisition of the necessary airport gate(s) and facilities. Details on the commencement of service or the cities that would be served by Southwest from LaGuardia have not yet been determined.

Southwest Airlines has bid $7.5 million for ATA Airlines and its 14 operating slots at LaGuardia Airport, and spokeswoman Beth Harbin said the airline intends to enter the market if a federal bankruptcy court approves the deal.

ATA closed down in early April and filed for bankruptcy. It's now liquidating.

Southwest has been careful to stress that although it's buying ATA Airlines, it only buying the operating certificate so that it could get the takeoff and landing slots.

You may remember that the federal government has proposed taking some New York airport slots away from incumbents and redistributing them as a way of reducing congestion and fostering competition -- an idea that the incumbents and the Air Transport Association are fighting.

The proposed rule lets the incumbents keep 85 percent of their slots Of the remaining 15 percent, some of the slots would be eliminated and the federal government would auction off the remainder.

In documents filed in bankruptcy court, ATA discusses its efforts to hang onto the slots so it could sell them. Originally, it wrote, the FAA planned to eliminate ATA's slots.For the FAA clarified its rules after the bankruptcy court set up procedures to sell off the slots.

"The Clarification further provided that if the acquiring entity is an air carrier, the FAA will allocate the 14 LaGuardia Slots to such entity, even if the acquiring carrier doesn't currently have a presence at LaGuardia.the details," ATA said.

If you're wondering what those billboard near D/FW Airport mean, they mean that the Allied Pilots Association is attacking the alliance between American Airlines and British Airways.

One says:

The other says:

The union, in the third year of contract talks with American, has asked the U.S. Department of Transportation to delay any decision on the alliance and give it a lot of scrutiny.

American, British Airways and Iberia have sought governmental authority to tighten their working relationship, including antitrust immunity.

Tuesday was the 15th anniversary of the Association of Professional Flight Attendants strike that hit American Airlines, finally ending on Nov. 22 when President Clinton urged the two sides to resume talks.

Two of the APFA officials recalled those events Tuesday, as they stood near a picket line of AA flight attendants circling in front of a Dallas/Fort Worth International Airport terminal.

One, Diana Dunn, a strike coordinator in 1993, is now a negotiator. The other Laura Glading, who headed the union's New York base in 1993, is now president of the union.

For their memories, keep reading.

I see that a number of people on this blog have questioned the appointment of Gerry McGuckin as mediator in contract talks between Southwest Airlines and the Transport Workers Union.

The general tone was that Mr. McGuckin couldn't be impartial because as a former US Airways pilot and negotiator, he has a labor bias.

Well, guess what? When the National Mediation Board looks for people skilled in labor matters, it tends to hire people who have experience in labor matters, from both the management side and the union side.

In case you were wondering what kind of people work as NMB mediators, I've reprinted the NMB official bios of its mediators. Keep reading if you're interested.

By the way, someone has taken the NMB bio of Mr. McGuckin that I posted last week, and added a bunch of negative stuff out of the bitter battle between the America West Airlines and US Airways units of the Air Line Pilots Association. I didn't write the bad stuff in the bio. I didn't write the good stuff, either -- it's straight from the NMB.

Speaking at a press conference to announce steps to improve holiday travel, President George W. Bush thanked Department of Transportation employees for their good work:

You have done a terrific job, as far as I am concerned. The past eight years I have not seen a traffic jam -- (laughter) -- waited for an airplane -- (laughter) -- or had my bags lost. (Laughter.)

The Air Line Pilots Association unit at United Airlines said United's pilots will obey a preliminary injunction from a federal judge. In a statement, it noted that the preliminary injunction itself hadn't been issued yet:

Nonetheless, ALPA has already advised the United pilots that it remains essential not to engage in any form of economic action involving United Airlines. ALPA will have no further comment at this time, except to say that ALPA, the United Master Executive Council and the United pilots will comply fully with the Court's Order when it is issued.

A judge on Monday issued a memorandum opinion and order saying she would enjoin ALPA and its members from taking any job actions.

United said it intends to seek a permanent injunction. Says Pete McDonald, executive vice president and chief administrative officer:

This is an important ruling because it means our customers and employees will not be subject to ALPA's illegal actions intended to disrupt our operations and intimidate our employees.

We will continue to be decisive and proactive in taking all steps necessary to ensure the success of our company for the benefit of all of our stakeholders.